What can Rochester do to revive retail downtown?
Seamus Kolb recently became the owner of Carroll’s Corn, the popcorn shop inside the subway below the Kahler Hotel. He says after a hard stretch through the worst of the Covid-19 pandemic, things are starting to look up for his business, and that’s cause for optimism.
But that optimism has been stymied a bit, he says, by what he sees around him - a lack of “open” signs and a plethora of “for lease” signs.
“If you walk downtown, you’re seeing gaps, you’re seeing closed businesses,” said Kolb. “You walk through the food court, and it’s 70 percent full. That’s not good for anybody.”
Prior to the pandemic, many of the retail spaces in the downtown area had been filled with bustling small businesses — the kinds that are vital for a thriving destination area.
But downtown Rochester, like many other city centers, has seen its restaurant and retail industries decimated by shutdowns and slow foot traffic, as previous trends, including the shift to online commerce and problems in the labor market, accelerated due to Covid-19. The result has been fewer small businesses seeking out space downtown, at a time when new development has made commercial space abundant.
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Bucky Beeman is a partner at Realty Growth Inc. He says it’s sort of a catch-22 right now to attract and retain tenants here: local entrepreneurs with big dreams and small pockets are opting to pursue their business in more affordable areas, but larger retailers are hesitant to put down roots in a growing market.
“For a retailer making a decision from 10,000 feet, from a different market, unless they come here and get to know the dynamics of the millions of visitors, who can stay here for months at a time, sometimes a year it’s difficult for us as brokers to get them to change the use of a space,” said Beeman.
With thousands of square feet available for lease and more construction on the way, activating downtown to its full potential was on the top of the minds of Destination Medical Center officials last Thursday, as the EDA team rolled out a plan to activate those spaces.
After focusing on hotels, residential, and life sciences early on, DMC Executive Director Patrick Seeb says the next phase of planning puts an emphasis on supporting brick-and-mortar retailers.
“This has always been on our radar screen, but it’s never been more important than now, coming out of the pandemic,” said Seeb. “One, because of the disruption existing businesses have felt, and also because of the change in downtown occupancy around the workforce, and the amount of space coming online.”
Chris Schad, director of business development for DMC, says one idea being floated now is to create ‘pop-up shops’ downtown before starting a long-term recruitment strategy in October. He says existing retailers would do better by filling in the empty space, even if the situation is temporary.
“How can we re-utilize some of the vacant downtown space, and provide some opportunities while we look for longer-term solutions?,” said Schad.
There are some who suggested DMC should do even further, however — among them DMC Corporation Board Chair R.T. Rybak. He said the retail industry has a dramatically smaller universe now than even a year ago, and to move forward in this new climate, it may take doing something different: putting funds directly in the hands of entrepreneurs.
“Bluntly, what people need right now in those situations right now aren’t loans, they need grants,” said Rybak. They need money to start the business and know that someone’s investing in them. That’s something that I think should be led at the local level, but I honestly think we should consider putting real dollars into this, co-invest in new, unique stores, and put the challenge out.”
It’s unclear whether DMC would be able to do that, thanks to language in the original agreement with the state legislature — DMC money can only be spent on public infrastructure. That definition was tested in 2020 when the initiative handed out one-time pandemic relief grants in partnership with the city, and in that case, retail was considered public infrastructure.
It may be a tougher task to get those sorts of programs approved now, Rybak says, but it’s not out of the question to head back to St. Paul and plead a new case: giving money out would serve the community better.
“I tend to believe the legislators would be supportive of saying we want to invest in small business,” added Rybak.
A little bit of extra cash for startup small businesses could go a long way, said Lizzy Haywood, general manager of People’s Food Co-op and board chair for the Rochester Chamber of Commerce. If businesses can get through the first year and a half, they’re more likely to stay open for long periods of time.
The best thing for government entities to do to help retain businesses, she says, is twofold: show people how to get to the storefront, and give those businesses a small bit of extra wiggle room in case post-pandemic shopping doesn’t immediately return to previous levels.
“The wayfinding and the capital are critically important, just to get us open and make sure that we can stay through the really hard opening period, that first 18 months for retail,” said Haywood.
While Haywood says the sad reality of the pandemic is clear — with a number of shops closing in the span of a year — she believes it’s best to look at the situation with a ‘holistic optimism,’ knowing there’s an opportunity to shift the balance of power in Rochester’s retail community.
Those open storefronts, she says, could and should be prioritized for entrepreneurs from diverse backgrounds. If that’s a route that DMC takes, she says it would benefit the whole community.
“Having diversification across ownership - people new to the country, people of BIPOC backgrounds — will mean we’re able to serve a wider variety of customers,” said Haywood. “I don’t just hope to, but anticipate seeing that grow.”
In Kolb’s mind, he believes brighter days are ahead for the downtown area, but after walking a thin line for 15 months, he says it will still take some time to get as many people into the store as there were before Covid. Since he’s fresh on the scene as an owner, he’s looking forward to the post-pandemic downtown atmosphere — though he still has concerns that others in the business community who have been around a little longer may not be able to look that far ahead.
“For me, I have time. I see the value,” said Kolb. “We’re going to have a beautiful downtown space here. With good music, we’ll get stuff going outside again, Thursdays Downtown coming back... it’s going to be fantastic. I think there is a little fear in some of the other businesses that are in a different situation, where it’s like — time is money!”
Isaac Jahns is a Rochester native and a 2019 graduate of the Missouri School of Journalism. He reports on politics, business and music for Med City Beat.
Cover photo: Seamus Kolb of Carroll’s Corn
